News
Widening credit woes pull down Asian stocks
Asian stocks fell, driving the benchmark index to the lowest level since November 2006, on concern credit market losses will widen and inflation will curb global growth.
Mitsubishi UFJ Financial Group retreated in Tokyo after Lehman Brothers Holdings said the two largest US mortgage lenders may need to raise $75 billion (Dh275bn) in capital. Kookmin Bank, South Korea's largest, tumbled by a record after JPMorgan Chase cut its rating. AU Optronics Corp led liquid-crystal display makers lower after Lehman lowered their price estimates. Inpex Holdings, Japan's largest oil explorer.
Japan's Nikkei 225 Stock Average lost 2.5 per cent to 13,033.10, the most since April 14. South Korea's Kospi Index plunged 2.9 per cent, the biggest drop since February 11. Hong Kong's Hang Seng Index fell 3.2 per cent. Futures for the US Standard & Poor's 500 Index dropped 0.6 per cent recently.
MSCI's Asian index has tumbled 24 per cent since its peak on November 1, beyond the 20 per cent threshold many consider to signal a bear market.
All benchmark indexes in the region are in bear markets, apart from Indonesia.
Financial stocks have led the declines in Asia this year as more than $401 billion of writedowns and credit losses at the world's largest banks and securities firms weighed on earnings. Stocks also fell on concern inflation will erode profits.
Fannie Mae and Freddie Mac fell to the lowest levels in 13 years in New York yesterday after Lehman analysts said the mortgage lenders may need to raise a combined $75bn to overcome further writedowns. Additionally, Merrill Lynch may report a second-quarter loss after $6bn of writedowns, Citigroup said.
Mitsubishi UFJ declined 3.4 per cent to 934 yen, while Sumitomo Mitsui Financial Group dropped 4.1 per cent to 771,000 yen. Profit at Japan's five largest banks slid 34 per cent in the year ended March 31 as sub-prime losses weighed on earnings and lending income dropped.
In Hong Kong, Bank of East Asia, the city's third- biggest by assets, slumped 5.9 per cent to HK$36.95.
The bank may need to double writedowns this year, Morgan Stanley analysts Anil Agarwal and Daniel Shum said in a report yesterday. They cut the bank's rating to "underweight".
Kookmin Bank slumped by a record 8.6 per cent to 55,000 won in Seoul.
GPT Group, Austalia's fourth-biggest real estate trust, tumbled 11 per cent to A$1.87, the lowest since May 1984, after Standard & Poor's lowered its credit rating, and Merrill Lynch, Citigroup and Goldman Sachs cut their recommendations on the stock.
Indian stocks fell, paring the Sensitive Index's two-day, 3.3 per cent gain after HSBC Holdings slashed its forecast for the benchmark.
Tata Motors, India's biggest bus and truckmaker, fell to its lowest in almost four years, while Reliance Industries, the nation's most valuable company, fell to a 10-month low.
Central bank measures to tame inflation will slow growth and earnings downgrades will crimp demand for shares, HSBC said yesterday, cutting its year-end Sensex forecast 20 per cent.
The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 176.34, or 1.3 per cent, to 13,349.65.
The S&P CNX Nifty Index on the National Stock Exchange slid 41.45, or one per cent, to 3,988.55.
Mitsubishi UFJ Financial Group retreated in Tokyo after Lehman Brothers Holdings said the two largest US mortgage lenders may need to raise $75 billion (Dh275bn) in capital. Kookmin Bank, South Korea's largest, tumbled by a record after JPMorgan Chase cut its rating. AU Optronics Corp led liquid-crystal display makers lower after Lehman lowered their price estimates. Inpex Holdings, Japan's largest oil explorer.
Japan's Nikkei 225 Stock Average lost 2.5 per cent to 13,033.10, the most since April 14. South Korea's Kospi Index plunged 2.9 per cent, the biggest drop since February 11. Hong Kong's Hang Seng Index fell 3.2 per cent. Futures for the US Standard & Poor's 500 Index dropped 0.6 per cent recently.
MSCI's Asian index has tumbled 24 per cent since its peak on November 1, beyond the 20 per cent threshold many consider to signal a bear market.
All benchmark indexes in the region are in bear markets, apart from Indonesia.
Financial stocks have led the declines in Asia this year as more than $401 billion of writedowns and credit losses at the world's largest banks and securities firms weighed on earnings. Stocks also fell on concern inflation will erode profits.
Fannie Mae and Freddie Mac fell to the lowest levels in 13 years in New York yesterday after Lehman analysts said the mortgage lenders may need to raise a combined $75bn to overcome further writedowns. Additionally, Merrill Lynch may report a second-quarter loss after $6bn of writedowns, Citigroup said.
Mitsubishi UFJ declined 3.4 per cent to 934 yen, while Sumitomo Mitsui Financial Group dropped 4.1 per cent to 771,000 yen. Profit at Japan's five largest banks slid 34 per cent in the year ended March 31 as sub-prime losses weighed on earnings and lending income dropped.
In Hong Kong, Bank of East Asia, the city's third- biggest by assets, slumped 5.9 per cent to HK$36.95.
The bank may need to double writedowns this year, Morgan Stanley analysts Anil Agarwal and Daniel Shum said in a report yesterday. They cut the bank's rating to "underweight".
Kookmin Bank slumped by a record 8.6 per cent to 55,000 won in Seoul.
GPT Group, Austalia's fourth-biggest real estate trust, tumbled 11 per cent to A$1.87, the lowest since May 1984, after Standard & Poor's lowered its credit rating, and Merrill Lynch, Citigroup and Goldman Sachs cut their recommendations on the stock.
Indian stocks fell, paring the Sensitive Index's two-day, 3.3 per cent gain after HSBC Holdings slashed its forecast for the benchmark.
Tata Motors, India's biggest bus and truckmaker, fell to its lowest in almost four years, while Reliance Industries, the nation's most valuable company, fell to a 10-month low.
Central bank measures to tame inflation will slow growth and earnings downgrades will crimp demand for shares, HSBC said yesterday, cutting its year-end Sensex forecast 20 per cent.
The Bombay Stock Exchange's Sensitive Index, or Sensex, fell 176.34, or 1.3 per cent, to 13,349.65.
The S&P CNX Nifty Index on the National Stock Exchange slid 41.45, or one per cent, to 3,988.55.